Thursday, 26 April 2012

Karambunai active, down on lawsuit report

KUALA LUMPUR (April 26): Shares of KARAMBUNAI CORP BHD [] were actively traded in the afternoon session on Thursday following a report that a group of people were preparing to take legal action the company, claiming it is nearly one year in arrears on "lease back" rental payments due to them.

At 4.37pm, Karambunai was down half a sen to 16.5 sen with 6.08 million shares done.

The South China Morning Post (SCMP) reported on Wednesday that the action was being proposed by about 100 owners of villas in the Nexus Residence development in Kota Kinabalu.

The group of owners, 49 of whom are from Hong Kong, plan to file their complaint against Karambunai Corp Bhd with the Malaysian Board of Arbitration, it said.

SCMP said that Matt Burden, one of the owners seeking back-payment, bought a 1,500 sq ft villa in the development off plan in 2007 for HK$4 million (RM1.58 million). The deal included a "lease back" component guaranteeing buyers an annual return of 7% of their purchase price for five years.

The daily said Karambunai came to Hong Kong in 2006 to market the first phase of the beachfront luxury residential project at the Mandarin Oriental Hotel.

The project was eventually completed in 2009 and all 243 villas have been sold, it said.

The buyers who opted for the "lease back" arrangement agreed to allow the project's management firm, Nexus Bay Resort Karambunai (NBRK), to rent out their villas to tourists, mostly from Europe, Burden said, according to SCMP.

Under the agreement, owners were also entitled to occupy their PROPERTIES [] for 20 days per year at no charge, it said.